Frugal Innovation Perfect Environment for Intangible Asset Growth

Frugal innovation is…Conceptually frugal innovation is a strategy for pursuing innovation in circumstances and environments in which there are few resources and few means, perhaps more so, but certainly not limited to emerging market countries.

Frugal innovation is widely characterized as representing circumstances where there is a managed convergence of stimulated and skilled intellectual, structural, and relationship capital with an inspiration to create innovation to respectfully benefit users – consumers residing at the lower end of a regions’ socio-economic pyramid, e.g., where affordability constraints are at work.

Frugal innovation objectives…The objectives of frugal innovation are as varied as needs warrant, for example, designing more near term business models or redesigning particular products and/or services to serve targeted beneficiaries in scalable, affordable, and sustainable manner.

Frugal innovation makes the most of what people control, their intangible assets…Frugal innovation is also often characterized as a ‘local phenomenon’ because entrepreneurs-innovators make the most of what they actually control, i.e., their intangible assets (know how, intellectual and structural capital). Even though frugal innovation is seldom characterized in this manner, it is routinely structured around developing products-services to solve particular problems at the most practical and sustainable levels. (Read full piece at ‘Business IP and Intangible Asset Blog’ http://kpstrat.com/blog)

In the west, it’s top down innovation…For a variety of reasons, the conventional ‘top down’ innovation born in the west, by design, at least initially, typically targets higher end consumers – users. Too, western innovation largely is committed to traditional, some characterize as archaic, business and distribution models-channels which are reliant on consistent abundance of non-sustainable resources, which frequently elevates product R&D and manufacturing costs. Collectively, advocates of frugal innovation suggest this makes numerous (S&T) innovations unaffordable – out of reach to ‘just as needy’ individuals at the lower levels of countries’ socio-economic pyramid. Ideally, frugal innovation can be configured to find attractivity to successive higher levels of ‘pyramid’ users.

Frugal innovation purists…In actual practice, the purist frugal innovator is less apt to characterize the absence of regulatory oversight or resources in emerging market countries, as being insurmountable or necessarily momentum stifling hurdles, rather as leverage points to mitigate such necessities, as is incumbent in the West, for investment entry for R&D, etc.

Multiple dimensions to frugal innovation…There are multiple dimensions to frugal innovation which I believe many parties would be well advised to acquire familiarity. For example, frugal innovation is not just limited to cost, manufacturing, or distribution issues. Rather, a driving theme to frugal innovation which GE’s Jeffrey Immelt is known to apply, is that it is a ‘simplification in all aspects of process and outcomes’! (This post was inspired by the work ofYasser Bhatti, a Higher Education Commission doctoral scholar at the Said Business School, University of Oxford.)